I Used The “First Time Home Buyers Credit” But Need To Sell, What Can I Do?

Q: I bought a house and received $8000 for the first time home buyer tax credit. I have lived there for 2 1/2 years and people keep trying to burglarize my house. I am now married with a 5 year old little girl and fear for their safety. Do I have any options for selling this house and moving into a safer place with out paying back the whole $8000 from tax credit?–Anonymous, Oklahoma City, OK

A: One of the requirements of getting the 2009 – 2010 Homebuyer Tax Credit is that you have to maintain the home as a primary residence for 36 months. So if you move out – even if you still own the property – you’ll have to repay the credit. Additionally, if you sell the home you have to pay back the credit. The good news is that you only have to repay up to the home’s gain, so you may not have to repay the entire credit. There are some exceptions to the requirement to repay the credit immediately on your next tax return:

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– If the spouse of a deceased homeowner continues to live in the house. If the spouse sells the home, though, before the time is up he or she must repay half the credit.
– Spouse remains in home to finish the 36 months after a divorce.
– Military or other personnel required to move more than 50 miles away.
– If your home is involuntarily damaged and you are forced to move.
However, you have to buy a new home within two years.